Precious Metals Tumble on Geopolitical Flare-Up

Gold and silver prices dropped sharply, with gold falling below $4,250 and silver plunging over 3.5% to its lowest level since March. The sell-off was primarily driven by escalating geopolitical tensions in the Middle East after reports of a US helicopter being downed by Iran, prompting a risk-off sentiment in the markets.

US Dollar Gains as Traders Await Inflation Data

The US Dollar Index strengthened as investors sought safe-haven assets amid the renewed Middle East tensions and souring market mood. Traders are also positioned cautiously ahead of the highly anticipated US Consumer Price Index (CPI) report, a key inflation metric that could influence the Federal Reserve's monetary policy outlook.

Central Bank Demand for Gold Remains Robust

Underlying physical demand from official sources continues to provide support for gold, with China's central bank extending its purchasing streak for the 18th consecutive month. This ongoing accumulation highlights a sustained trend of sovereigns adding the precious metal to their reserves.